DGAP-News: BayWa AG / Key word(s): Half Year Results
BayWa AG: Mid-year result better than expected: Growth strategy pays
off - BayWa looking to increase its earnings again in 2012
02.08.2012 / 10:30
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Mid-year result better than expected: Growth strategy pays off - BayWa
looking to increase its earnings again in 2012
BayWa AG, Munich, continued its positive development after a very good
start to 2012, closing the first half of the year with a steep rise in
revenues and earnings. The international trading and service company
recorded EUR5.1 billion in revenues as of June 30, 2012, 11.9 percent up on
last year's figure of EUR4.6 billion. EBIT (earnings before interest and
taxes) came to EUR91.1 million after six months, corresponding to a 2.7
percent increase compared to EUR88.7 million in the same period last year.
The Energy Segment and Renewable Energies Business Unit, which profited
from a strong demand for solar modules, were the main contributors to the
exceptionally positive business performance in the first half of 2012. The
Agricultural Segment also recorded above-average development primarily due
to the acquisition of Turners & Growers in 2012 which generated
higher-than-expected results. The initial consolidation of Turners &
Growers resulted in the Fruit Business Unit contributing more than 15
percent to the revenues of the Agricultural segment for the first time.
BayWa remains confident that Turners & Growers, which particularly profits
from growth in the Asian market, will continue its positive development in
the second half of the year.
'This development clearly shows that our growth strategy is paying off. The
half-yearly result exceeded all our expectations,' said a very pleased
Klaus Josef Lutz, CEO of BayWa AG, at the presentation of the company's
figures.
BayWa AG expects performance to remain positive in fiscal year 2012 in view
of rising grain prices, continuously strong demand for agricultural
equipment, on-target renewable energies projects and the seasonally strong
results in Building Materials in the months July to October, which are yet
to be recorded. 'We are aiming for an even better result in 2012 than in
2011,' said Klaus Josef Lutz optimistically, though the Euro and financial
crisis has made it even more difficult to give an accurate economic
forecast.
Agriculture: Above-average performance in the first half of the year
The Agricultural Segment generated revenues of EUR2.6 billion in the first
half of 2012 (prior year: EUR2.3 billion), corresponding to approximately
13 percent growth. EBIT came to EUR68.5 million (prior year: EUR71.8
million). The slight year-on-year drop in EBIT by less than 5 percent is
primarily due to the lower margins in the grain and fertilizer trade.
Whereas grain trading in the prior year profited from steeply rising prices
at the beginning of the harvest, the price hike in 2012 only set in at the
end of the subsequent collection of the harvest and after the sale of the
stored grain.
The Agricultural Trade Business Unit (the trade in agricultural produce and
operating resources) generated revenues of around EUR1.74 billion (prior
year: EUR1.67 billion) and EBIT of approximately EUR44.0 million (prior
year: EUR58.1 million) in the first half of 2012. Overall, the company
recorded above-average performance in agricultural trade in the first half
of the year. Low profit margins in the grain and fertilizer trade were
largely offset by high grain volumes during subsequent collection as well
as excellent seed and crop protection aides' sales.
'The expected average grain harvest in Germany and Europe, as well as the
expected poor harvest in the USA and parts of the CIS, is likely to
significantly increase grain price volatility in the coming months and
boost the rising price trend,' explained Klaus Josef Lutz. BayWa and its
customers would profit from this development, as rising grain prices also
improve investment opportunities for farmers, he added.
The Fruit Business Unit generated revenues of EUR202.3 million in the first
half of 2012 (prior year: EUR75.7 million) due to the initial consolidation
of Turners & Growers. EBIT amounted to EUR10.5 million (prior year: EUR2.0
million). Global fruit trader Turners & Growers from New Zealand managed to
sell its harvest at good prices, whereas the prior year's record harvest in
Germany created low margins. The summer/fall fruit harvest in Germany is
expected to be rather average once again, meaning that sales margins will
probably increase.
The Agricultural Trade Business Unit saw sales rise again and also profited
from order backlog dating back to 2011. Revenues increased by 19.5 percent
year-on-year to EUR632.9 million during the reporting period (prior year:
EUR529.5 million). EBIT climbed by 20.4 percent to EUR14.0 million (prior
year: EUR11.7 million). Agricultural Trade increased its sales of new
machinery by at least 22 percent and expanded its service business. As the
backlog from 2011 has now been processed and order intake has normalized,
BayWa anticipates a slight decline in growth in this Business Unit in the
second half of the year.
Energy: Renewable energies perform better than expected, heating oil
catches up
In the first half of 2012, revenue in the Energy Segment (fossil fuels and
renewable energies) went up by 34.4 percent to EUR1.7 billion (prior year:
EUR1.3 billion). EBIT profited from this development, soaring to EUR15.9
million (prior year: EUR1.0 million). This increase is mainly due to higher
earnings from the trade in renewable energies. On the one hand, demand for
solar modules boomed in Germany on account of the continuing debate about
changes to the Renewable Energies Act, and the trade in PV modules also
developed very well in the USA. On the other hand, most of the solar
systems sold for a profit in Germany were those constructed by the BayWa
r.e companies as part of their project business. Systems with almost 9
Megawatt (MW) of total output were sold in this region in the first half of
2012. As a result, EBIT in this Business Unit amounted to EUR14.6 million
(prior year: EUR-0.6 million).
The traditional heating oil business caught up in the second quarter thanks
to the dropping oil price. However, margins were down from the previous
year. It is uncertain when this trend will reverse itself. Developments in
recent weeks show consumers' price sensitivity. When the heating oil price
fell in spring, BayWa's order intake shot up; since prices started rising
again in the past weeks, demand has been dropping sharply once more. Due to
weather conditions, BayWa expects to receive a higher number of orders in
the third and fourth quarter, but the achievable volume will greatly depend
on the general oil price performance.
'With regard to renewable energies, we expect that customers will continue
investing in solar modules now that the feed-in tariff law, which has
finally been passed, will provide better planning security,' explained
Klaus Josef Lutz. Because the limit for solar systems has been set at 52
Gigawatt (GW) and currently installed output in Germany comes to
approximately 28 GW, Klaus Josef Lutz regards Germany as a positive
environment for photovoltaic, wind and biogas power. The new energy
promotion law has only been marginally amended regarding the two latter
types of power generation. He went on to explain that the international
renewable energies business was also going very well, particularly in the
USA with regards to wind power projects. 'International growth is the right
strategy for us, and we believe that we are excellently positioned in this
respect,' commented the CEO.
Building Materials: Segment profits from positive economic situation;
high-margin business expected in the second half of the year
In the first half of 2012, revenues in the Building Materials Segment,
which exclusively comprises the trade in building materials, came to
EUR813.0 million (prior year: EUR978.5 million). EBIT amounted to EUR 4.1
million (prior year: EUR 13.2 million). These figures are the result of the
spin-off of the DIY & Garden Centers Business Unit at the beginning of this
year as well as the traditionally weak wholesale business in the first half
of the year. Higher-margin business (warehousing business) is expected in
the second half of the year on account of the season. This should have a
positive impact on EBIT.
After an excellent mid-year result in 2012, the CEO of BayWa AG, Klaus
Josef Lutz, also expects positive overall performance in the second half of
the year. He forecasts a corresponding increase in earnings if weather
conditions and market developments remain within their expected scope.
Contact:
Marion Danneboom, BayWa AG, Head of PR/Corporate Communication,
tel. +49 (0)89/92 22-36 80, Fax +49 (0)89/92 22-36 98,
e-mail: marion.danneboom@baywa.de
End of Corporate News
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Language: English
Company: BayWa AG
ArabellastraÃe 4
81925 München
Germany
Phone: 089/ 9222-3691
Fax: 089/ 9222-3698
E-mail: marion.danneboom@baywa.de
Internet: www.baywa.de
ISIN: DE0005194062, DE0005194005,
WKN: 519406, 519400,
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), München;
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
Stuttgart
End of News DGAP News-Service
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180036 02.08.2012
DGAP-News: BayWa AG: Mid-year result better than expected: Growth strategy pays off - BayWa looking to increase its earnings again in 2012
| Source: EQS Group AG